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Latest news from the feed and fertiliser markets

By Ian Buchanan
Let us all hope for a prosperous 2018 across all farming sectors and I hope it gives us all that we can only dream of …..like a Grand Slam for Scotland in the Six Nations!!
The first thing to mention in this update is undoubtedly the confusion around the supply and pricing of minerals and vitamins. A fire at a German factory owned by BASF has meant a sharp increase in the price of vitamin A and vitamin E. This factory accounted for roughly 45% of the total world supply of the products and the latest update suggests the factory won’t be up and running or anywhere near full capacity until the summer. Going forward this is likely to impact on any product containing vitamins, whether that is feed blocks, powdered minerals, compound feed or blends. Anyone who is contracted on feed will likely see a small rise for the duration of their contract – however, the only way a rise can be passed on to you is if a supplier has had Force Majeure called on them which means that their supply cannot be maintained due to circumstances beyond their control, for example a massive flood, or in this case, a catastrophic fire!
This leads on to a more generalised point, that across the board, we often see suppliers of feed, blocks, minerals, fertiliser and seed scrambling around at this time of year to seize on every opportunity to push up prices and grow their margins, knowing that many farmers are reluctant to rock the boat mid-season. Sometimes it is blamed on currency changes, sometimes its interruptions in supply such as factory breakdowns and sometimes it’s the weather; ice in the Great Lakes or flooded access roads at ports.
There may be some logic as to why raw material prices do move up but suppliers use every excuse to push up feed or fertiliser prices immediately which suggests that they do not have any cover already (very unlikely) and that all of any price change is going to impact on them immediately. They boast that they are experts in buying and hedging raw materials so challenge them to prove it and to use all their wits to keep your prices the same. A big part of our job at Aspatria is to challenge suppliers and not to take any excuse for pushing prices up at face value. We will continue to do our best to put pressure on all our suppliers to keep prices down as any price increase is taking a pound from you and giving it to them!
Overall feed prices have been relatively stable with the exception of the lower energy and lower protein feeds, such as PK and Wheatfeed where strong demand for these cheaper feeds from compounders has led to some shortages in availability and higher prices, but cereal and soya prices which are a good indicator of overall feed costs have not really moved over the last 6 months and forward prices look similarly flat.
Once again our customers who took our advice and forward contracted their feed supply have avoided spot price increases and have the benefit of knowing their feed costs going forward.
Moving on to fertiliser, prices remain firm. They are not currently rising, as Nitrogen prices seem to have steadied, but P and K continue to show signs of potentially moving higher. These rises in P and K costs will have to be passed on at some point and will affect grades such as 20-10-10 and 24-0-14+S more than 25-5-5. This combined with the fact that we are approaching usage time means that we do not expect to see a drop in prices until the traditional re-set period in late May or early June. We are working on a system to try and provide some better prices on fertiliser going forward which could help you if you lack the storage to take product when early season prices are released and will also hopefully allow us to buy in larger quantities on your behalf. Further details will follow when we’ve finalised our offering.
Prices are an indication only and not firm quotes. All information is given in good faith and subject to change at any time.

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info@aspatriafarmers.co.uk | 01697 320207 | Copyright 2018 Aspatria Farmers Ltd.